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Vertex signs merger agreement with Cordy Oilfield Services, announces simultaneous financing, Canadian Business Journal

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SHERWOOD PARK, Alberta and Calgary, Alberta, February 25, 2022 (GLOBE NEWSWIRE) — (TSXV: VTX) – Vertex Resource Group Ltd. (“Vertex“) And Cordy Oilfield Services Inc. (TSXV: CKK) (“Cody oil field“) Are pleased to announce that they have signed a final merger agreement (“).Merger agreement”) Vertex agrees to acquire all of Cordy Oilfield’s outstanding shares and issued shares. The acquisition of Cordy Oilfield will increase the strength and service delivery of Vertex’s entire business.

“This strategic acquisition allows Vertex to complement multiple products within the group. We are pleased to bring Cordy under our umbrella to provide our customers and employees with the next level of experience. We look forward to celebrating the long-standing success of the Cody team and supporting its continued success, “said Terry Stephenson, President and Chief Executive Officer of Vertex.

The acquisition consists of a three-cornered merger (“merger“) Below Business corporation law (Alberta) Holders of common stock in the Cody oil field (“Cody share“) Receives Vertex common stock (“Vertex share”) And Vertex Energy Services Ltd., a wholly owned subsidiary of Vertex, will merge with Cordy Oilfield, and Vertex will own all of the issued and issued shares of the merged company. In connection with the signing of the merger agreement, Cody’s Nominee (“Cordinominie”) Is proposed to be appointed to Vertex’s Board of Directors, subject to approval by TSXV (defined below).

Under the terms of the merger agreement, Cody Oilfield shareholders will receive 0.081818 Vertex shares for each Cody share held (“Exchange ratioAs a result, approximately 18,913,253 Vertex shares were issued to the shareholders of the Cody Oilfield. If the merger is completed on the day of this news release, Cordy Oilfield shareholders will receive a total of approximately 17.2% of the outstanding Vertex shares issued. There are no other types of issued securities in the Cody oil field that are subject to or are included in the merger.

Vertex and Cordy expect the acquisition to create a stronger environmental services business and enhance free cash flow generation through consolidation savings, duplicate headquarters costs, and increased fleet and personnel utilization. I am. The benefits of the merger are expected to include:

  • A highly complementary environmental service line that can provide expanded scale, utilization, and growth through cross-selling services to Vertex and Cordy customers.
  • Within 12-18 months after the integration is complete, an estimated annual integration cost reduction of approximately $ 1 million is expected to be realized.
  • The expected synergies of the merger are expected to immediately increase cash flow from operating activities of all Vertex shareholders and free cash flow per share.
  • Improving the cost structure to serve a growing and integrated customer base.
  • Strong proforma financial position with attractive free cash flow from the business. This will reduce senior debt and reduce Vertex’s target senior debt to EBITDA ratio by less than 2.0 times. This is expected to be achieved within two years of closing.
  • Strengthen Vertex and Cordy’s position to drive and enable environmental, social and governance initiatives for Vertex, Cordy and its customers.
  • Opportunity for Cody’s shareholders to hold shares in a larger and more diverse organization with a history of growth and stronger access to markets and capital to drive the development of Cody’s business.

“I’m really happy that Cordy has joined the Vertex family,” says Stephenson. “Cody is a professional value-added business with quality talent and equipment. This acquisition is very suitable for us and our shareholders. By joining Vertex, Cordy continues to be strong. We expect to be able to provide the support and capital needed to promote performance. “

Completion of the merger is subject to the following conditions. (I) At a special meeting of Cody shareholders scheduled to be held around April 22, 2022, approval of Cody shareholders in accordance with applicable Companies and Securities Acts. (Ii) Approval of TSX Venture Exchange Inc. (“TSXV”); (Iii) Completion of a private placement (defined below). (Iii) Other specific termination conditions customary in this type of transaction.

The merger agreement contains customary transaction protection clauses in favor of Vertex. This includes, in particular, non-solicitation clauses that are subject to the “Fiduciary Security” clause, which gives Cordy the right to consider and accept good proposals. Consistent with a good suggestion. The contract provides a $ 500,000 termination fee that Cody will pay if the merger is not completed in certain circumstances.

Vertex or Cordy Oilfield does not pay finder fees in connection with Amalgamation. There is no control person (defined in TSXV policy) or Cordy insider, except for the Cordy nominee, who will become a Vertex insider (defined in TSXV policy) after being appointed to Vertex’s board of directors. Oilfields are currently or will be following Amalgamation, Control Persons, or Vertex Insiders. Neither Cody or Vertex’s non-independent business-to-business parties (as defined in TSXV’s policy) have a significant interest in the merger, except for the respective holdings of Cody’s shares by Cody’s insiders.

Vertex also announced that it will complete a non-mediated placement, subject to TSXV approval.Private placement”) $ 15,000,000 in collateralized subordinated convertible bonds (“Convertible bonds“). Completion of the private placement is a condition prior to the merger.

The term of the convertible bond is 5 years from the issue date (“semester“). Convertible bonds bear an annual interest rate of 8% from the date of issuance and are paid in cash monthly after payment. At any time during the period, convertible bond holders may choose to convert the issued net principal or any portion thereof to Vertex common stock (“Common stock) Price earnings ratio of $ 0.65 per share (“Conversion price“).

Convertible bonds and common shares that can be issued at the time of conversion are subject to a statutory holding period of four months and one day from the end of the private placement.

The proceeds from the private placement will be used to meet continuing obligations after the merger, future acquisitions and working capital. Convertible bonds are subordinated to Vertex’s existing secured debt facility.

Private placements are subject to TSXV approval and other specific commercial conditions customary in this type of financing.

About VERTEX

Headquartered in Sherwood Park, Alberta, Vertex employs approximately 800 full-time and contract employees providing environmental services throughout North America. Vertex is a leading provider of environmental solutions, a unique combination of environmental consulting and environmental field services and equipment. Vertex’s integrated environmental solutions support client asset development, operations, decommissioning, and recovery in five North American sectors: energy, mining and industry, utilities, agriculture and forestry, and government. Founded in 1962, Vertex combines 60 years of experience with an innovative and modern approach to provide the market with a versatile and professional solution.

About Cody Oil Field

Cody provides construction and environmental services in western Canada. Cody is headquartered in Calgary, Alberta, Canada and is listed on the TSX Venture Exchange under the trading code “CKK”.

For more information, please contact:

Vertex CEO Terry Stephenson:
Tel: 780-464-3295
Email: tstephenson@vertex.ca

Darrick Evong, CEO of Cordy Oilfield:
Tel: 403-262-7667
Email: darrick.evong@cordy.ca

Leader advisory

This news release contains statements regarding the proposed merger, the respective businesses and operations of the Vertex and Cordy fields, and the future outlook for private placements, to the extent of the meaning of applicable securities law. In some cases, forward-looking statements can be identified using words such as “plan,” “expect,” “not expect,” “intended,” “budget,” and “plan.” ”,” Estimate”, “ Prediction”,” Intention”,” Prediction” or variations of such words or phrases, or a particular action, event, or result” There is a”,”indicating that it may be”,” will be”,” may be” or” taken”,”occurs” or” is achieved ”. Such forward-looking statements include: (ii) Percentage of issued and issued Vertex shares by shareholders of the Cody Oil Field, (iii) Proposal for Issuance of Convertible Bonds And the use of revenue resulting from it, and (iv) the use of revenue from private offerings. Forward-looking statements include other statements that do not refer to historical facts.

By its very nature, forward-looking statements are hypothetical and subject to inherent risks and uncertainties. There is a risk that merger and convertible bond offerings will be delayed, canceled, suspended or terminated. As a result, future results may differ materially from the forward-looking statements made in this news release.

Past performance statements should not be construed as an indication of future performance. Forward-looking statements carry significant risks and uncertainties and should not be read as a guarantee of future performance or results and do not necessarily indicate exactly whether such results will be achieved. .. Due to many factors, including those mentioned above, actual results may differ materially from those described in the forward-looking statements. All forward-looking statements made in this press release are fully qualified by these notes.

Readers should be careful not to place undue reliance on such forward-looking statements. Forward-looking information is provided as of the date of this press release, and both Vertex and Cordy Oilfield are obliged to publicly update or revise forward-looking statements, except as required by law. I will not bear it. Forward-looking statements are provided here for the purpose of providing information on the proposed issuance of convertible bonds and the use of revenue. Please note that such information may not be suitable for other purposes.

Neither TSXV nor its regulatory service provider (the term is defined in TSXV’s policy) is responsible for the validity or accuracy of this release.


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Vertex signs merger agreement with Cordy Oilfield Services, announces simultaneous financing, Canadian Business Journal

Source link Vertex signs merger agreement with Cordy Oilfield Services, announces simultaneous financing, Canadian Business Journal

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